Soluna Unleashes First Batch of NVIDIA GPUs, Targeting $80 Million Revenue Over Three Years

Rhea-AI Summary

Soluna Holdings announced the successful raising of a $12.5 million credit facility for its new subsidiary, Soluna Cloud.

This financing will back the acquisition of NVIDIA H100 GPUs under a 3-year managed-services agreement at a hydro-powered data center. Soluna anticipates annual revenue of $16 million to $26 million during full deployment, targeting a total revenue of $38 million to $80 million across the contract's duration.

Soluna Cloud's services, set to launch in July 2024, will be powered entirely by renewable energy and will support substantial AI workloads. Customers can sign up at SolunaCloud.com.

Positive

• Raised $12.5 million in financing.
• Expected yearly revenue of $16 million to $26 million.
• Total revenue forecast of $38 million to $80 million over three years.
• Launch of AI Cloud services in July 2024.
• Partnership with a Tier 3 hydro-powered data center.
• Services powered by 100% renewable energy, consuming zero water.

Negative

• None.

Insights

Financial Analyst

Soluna's recent announcement about securing a $12.5 million credit facility and launching its AI-focused cloud service marks a significant step for the company. The expected revenue of $16 million to $26 million per year from this new venture is noteworthy. This suggests a solid revenue stream, especially considering the promise of total revenues between $38 million to $80 million over three years. This is substantial for a company of Soluna's size and indicates a potential positive impact on its stock price in the short to medium term.

It's important to consider how this aligns with Soluna's overall strategic goals. The focus on renewable energy-powered data centers could position Soluna favorably in the growing market for sustainable technology solutions, which is increasingly attracting investor interest.

However, investors should be mindful of the inherent risks. The company's projections are based on current market conditions, which can fluctuate. Additionally, the adoption rate of their AI services by enterprise customers will be critical. If demand falls short of expectations, revenue targets might not be met, impacting Soluna's financial health.

Overall, the move appears strategically sound, but it's tied to market and technology adoption risks that investors need to keep in mind.

Tech Expert

Soluna’s deployment of NVIDIA H100 GPUs within a Tier 3 hydro-powered data center is a notable technical achievement. The H100 GPUs are among the most advanced available, designed specifically to handle intensive computing tasks such as those required by generative AI workloads. These GPUs will enable Soluna Cloud to support large language models with at least 70 billion parameters, which can significantly improve AI performance and capabilities.

From a technological standpoint, leveraging a Tier 3 data center ensures high availability and reliability, which are essential for enterprise-grade AI applications. Additionally, using renewable energy aligns with the growing trend toward green computing, addressing both performance and environmental concerns.

The collaboration with a strategic OEM partner to secure these GPUs and the focus on zero water consumption further enhances the environmental appeal. This can attract environmentally conscious enterprises looking for sustainable AI solutions.

Nevertheless, the integration of such high-end technology poses its own challenges. These include the substantial upfront investment, the need for continuous technical expertise to maintain and upgrade systems and the evolving nature of AI workloads that may demand further innovations down the line.

Market Research Analyst

The AI cloud market is rapidly expanding, driven by the increasing adoption of AI technologies across various industries. Soluna's entry into this space with a renewable energy-powered offering could differentiate it from competitors. The market's appetite for sustainable and scalable AI solutions is significant and Soluna’s positioning could tap into this growing demand.

One noteworthy aspect is the timing. The launch of Soluna Cloud services in July 2024 aligns well with the current trend of enterprises investing heavily in AI capabilities. The partnership strategy with a strategic OEM partner and the use of top-tier NVIDIA GPUs may bolster Soluna's credibility and attract high-profile clients.

However, the competitive landscape in AI cloud services is fierce, with major players like AWS, Google Cloud and Microsoft Azure. Soluna will need to clearly articulate its unique value proposition and ensure robust marketing and sales efforts to carve out a niche in this space.

The long-term success will hinge on their ability to scale operations, secure continuous demand and maintain the technological edge. If managed well, this venture could position Soluna as a significant player in the AI cloud market.

Raises $12.5 Million and Secures Sustainable Hosting for Generative AI Workloads

ALBANY, N.Y.--(BUSINESS WIRE)-- Soluna Holdings, Inc. (“SHI” or the “Company”), (NASDAQ: SLNH), a developer of green data centers for intensive computing applications including Bitcoin mining and AI, announced today it has successfully raised a credit facility of $12.5 million at its new subsidiary Soluna Cloud, Inc., marking the completion of the first tranche in a larger fundraising effort led by BitOoda Technologies and Imperial Capital.

(Photo: Business Wire)

This financing will support the launch of Soluna Cloud, and secure NVIDIA H100 GPUs leveraging a 3-year managed-services agreement at a Tier 3 hydro-powered data center in collaboration with the Company’s Strategic OEM Partner. Soluna expects to generate $16.0 million to $26.0 million in revenue per year as the site is fully deployed with its customers based on current market conditions. Over the life of the contract, the Company expects to generate a total of between $38.0 million to $80.0 million.

“This is a pivotal point for Soluna Cloud as we are now able to open our waitlist for this highly anticipated business at Soluna. AI is set to transform the enterprise, and Soluna is making a vital contribution to making it a climate-friendly reality,” said John Belizaire, CEO of Soluna.

Customers can sign up for the service at SolunaCloud.com.

As part of the Company’s collaboration with its Strategic Partner, Soluna Cloud’s services will be 100% powered by renewable energy and consume zero water, offering state-of-the-art capabilities and significant growth and revenue opportunities. Soluna Cloud’s implementation will feature an enterprise-grade system, a substantial block of Infiniband Meshed NVIDIA H100 SXM GPUs designed specifically for Enterprise Generative AI workloads. The initial cluster will support large language models with at least 70 billion parameters. The services will be made available for Enterprise customers and Generative AI Labs starting as early as July 2024.

“Launching our first AI Cloud implementation will allow us to kickstart our Enterprise AI business as we complete the development of our innovative Helix data centers,” expanded John Belizaire.

Soluna Cloud’s venture is a novel approach to developing zero-carbon infrastructure for AI, addressing the growing demand for sustainable and scalable AI infrastructure. The convergence of AI and renewable energy positions Soluna Cloud at the forefront of solving the world’s wasted energy problems while delivering cutting-edge AI solutions.

For more information about Soluna Cloud, please visit https://www.solunacloud.com.

More information about the financing and the agreement with Soluna’s Strategic Partner can be found in the Company’s upcoming 8-Ks.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Soluna Holdings, Inc. may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including but not limited to statements about Soluna’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, further information regarding which is included in the Company’s filings with the Securities and Exchange Commission. All information provided in this press release is as of the date of the press release, and Soluna Holdings, Inc. undertakes no duty to update such information, except as required under applicable law.

About Soluna Holdings, Inc (SLNH)

Soluna is on a mission to make renewable energy a global superpower using computing as a catalyst. The company designs, develops, and operates digital infrastructure that transforms surplus renewable energy into global computing resources. Soluna’s pioneering data centers are strategically co-located with wind, solar, or hydroelectric power plants to support high-performance computing applications including Bitcoin Mining, Generative AI, and other compute-intensive applications. Soluna’s proprietary software MaestroOS(™) helps energize a greener grid while delivering cost-effective and sustainable computing solutions, and superior returns. To learn more visit solunacomputing.com. Follow us on X (formerly Twitter) at @SolunaHoldings.

About the Advisors: BitOoda and Imperial

BitOoda Technologies, LLC, a boutique investment bank specializing in AI and HPC, is serving as Financial Advisor to Soluna. BitOoda Technologies, LLC and Imperial Capital, LLC are serving as placement agents.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240624064211/en/

Sam Sova

Partner and CEO

SOVA

Sam@letsgosova.com

Source: Soluna Holdings, Inc.

FAQ

What is Soluna's recent financing achievement related to SLNH?

Soluna has raised a $12.5 million credit facility for its subsidiary, Soluna Cloud.

How much revenue does Soluna expect to generate from its new venture?

Soluna expects to generate between $16 million to $26 million per year, totaling $38 million to $80 million over three years.

When will Soluna Cloud's services be available?

Soluna Cloud's services are expected to be available starting July 2024.

What type of GPUs will Soluna Cloud use?

Soluna Cloud will utilize NVIDIA H100 GPUs under a managed-services agreement.

How is Soluna Cloud ensuring sustainability for its AI workloads?

Soluna Cloud's services will be powered 100% by renewable energy and will consume zero water.